Norwich Union steps up plans for pay as you go car insurance

Trials for pay-as-you-drive insurance have reportedly been brought forward by Norwich Union.

15:47 23 August 2004

Trials for pay-as-you-drive insurance have reportedly been brought forward by Norwich Union.

The UK insurer previously said it planned to begin a pilot programme for the scheme later this year, but has now revealed that tests are already underway on the system.

Norwich Union is using satellite navigation technology to track cars and bill drivers according to use

A total of 5,000 drivers will eventually take part in the trial, which will last up to two years. Each participant will have a black box fitted in their car, about the size of a DVD, which will charge them according to when and how they use their cars.

If Norwich Union deems the trials successful it will offer pay-as-you-drive insurance to all drivers in late 2006.

The company claims it has received a flood of interest in the groundbreaking scheme from consumers.

However, some motoring experts have criticised the scheme, pointing out that it cannot determine who is behind the wheel.

Robert Ledger, programme director for the insurance scheme, said: "We believe this initiative is a major breakthrough in the development of more tailored motor insurance premiums, enabling us to treat all drivers as individuals."